Permanent Account Number (PAN

Permanent Account Number is a ten digit number which helps the Assessing Officer to identify any person. Currently the Income Tax Department is allotting PAN under the new Series to all assesses which includes ten alphanumeric characters and is issued in the form of a laminated card. The PAN is finally meant to replace the General Index Register Number which is at present in use.

As per section 139A of the Act obtaining PAN is compulsory for the following persons:-
1. Any individual whose total income or the total income of any other individual in respect of which he is assessable under the Act exceeds the maximum amount which is not chargeable to tax.
2. Any individual who is carrying on any business/profession whose total sales, proceeds or gross receipts are or are possible to exceed Rs. 5 Lakhs in any previous year.
3. Any individual who is required to submit a return of income under section 139(4) of the Act.
The obligation for applying for allotment of PAN under the New Series has now been extended to the whole of India.

Is PAN necessary?
It is obligatory to quote PAN on return of income, all correspondence with any income tax authority and challans for any payments due to Income Tax Department. It is also obligatory to quote PAN in all documents pertaining to financial transactions notified from time-to-time by the Central Board of Direct Taxes. Few such transactions are sale and purchase of immovable property/motor vehicle or payments in cash, of amounts exceeding Rs. 25,000/-to hotels and restaurants or in connection with travel to any foreign country. It is also obligatory to state PAN for obtaining a telephone or cellular telephone connection. Similarly, PAN has to be mentioned for making a time deposit exceeding Rs. 50,000/- with a bank or post Office or depositing cash of Rs. 50,000/- or more in a bank.(Section 139A)

List the Notified transactions where PAN must be quoted.
Every individual shall quote his permanent account number or General Index Register Number in all documents pertaining to the transactions specified below :-
a. Sale or purchase of any immovable property valued at Rs 5, 00, 000 or more.
b. Sale or purchase of motor vehicle/vehicles, which needs registration by a registering authority.
c. A time deposit, exceeding Rs 50, 000, with a banking company to which the Banking Regulation Act, 1949 applies (including any bank /banking institution mentioned to in section 51 of that Act)
d. A deposit, exceeding Rs 50, 000, in any account with Post Office Saving Bank
e. A contract of a value exceeding 10lakhs, for sale or purchase of securities
f. Opening an account in a bank
g. Making an application for telephone connection (including a cellular telephone connection)
h. Payment to hotels and restaurants against their bills for an amount exceeding 25, 000 Rs at a time.

Any person, who has not been allotted a PAN and who makes payment in cash or else by a crossed cheque drawn on a bank or by a crossed bank draft in respect of any transaction mentioned in clauses (a) to (h), shall have to make a declaration in Form No. 60 giving therein the particulars of such transaction.

In simple terms, it is mandatory to quote PAN in
• Application to open an account with a bank
• Application for  telephone connection (including a cellular telephone)
• Documents relevant to sale or purchase of a motor vehicle
• Documents relevant to sale or purchase of immovable property valued at Rs. 5 lakh or more
• Documents relevant to deposits exceeding Rs. 50,000 in any account with a Post Office Savings Bank
• Documents relevant to a contract of a value exceeding Rs. 10lakhs for sale/purchase of securities (Shares, Debentures etc.)
• Payment to hotels & restaurants against their bills for an amount exceeding Rs. 25,000 at a time
• Returns of income
• Challans for payment of direct taxes
• All correspondence with Income-Tax Department

Details required
• Individuals must give their, as well as their father's full name with expanded initials.
• Married ladies must give their father's name in full and not husband's name
• Exact date of birth (not merely month or year) should be specified.
• Pin code should be mentioned in all your addresses.
Failure to comply with the provisions of section 139a of the income-tax act will make you to pay the penalty of Rs. 500/- (minimum) to Rs. 10,000 (maximum) for each default or failure.

shared by: mr. rahul kumar